Many charitable, non-profit and educational organizations (collectively “non-profit organizations”) are funded by endowment funds from various donors and sources. Endowment funds are those of which that are received from a donor with the restriction that the principal is not expendable. Most commonly, endowment funds are pooled together when the organization has discretion as to how the funds are invested, and when the funds have similar investment objectives.
A unitized accounting system is an accounting system commonly used by non-profit organizations that accounts for a fund's interest in an investment pool on the basis of units. Each individual fund receives units that are proportional to the fund's share in the investment pool. A donor receives units when money is deposited into the pool. Alternately, units are reduced when money is removed. Non-profit organizations use unitization to accurately distribute cash income earned between the participating funds in the pool, accurately distribute changes in investment market values between the participating funds in the pool, and accurately compute the pool's investment performance. Although advantageous, unitization requires complex and burdensome calculations to very large amounts of financial data. Currently, many organizations use tedious spreadsheets to perform the unitization of pooled investment funds. The use of spreadsheets can be time-consuming and highly prone to human error.
Further, the unitization calculations can require processing power that will likely over-burden a non-profit organization's computing system. Accordingly, it can be very advantageous to monitor the funds, perform the calculations, and run reports using a pooled endowment management system. However, conversion from existing spreadsheet systems to the management system can be required to allow for use of such a system.
Presently, the importation of fund data into a fund endowment management system can be very tedious, time consuming and prone to human error. A pooled endowment fund is comprised of vast amounts of critical data. It may comprise many funds, each with its own transaction and distribution history, balances and historical data. Manual entry of the data into a database of the management system can often lead to serious errors and may create significant problems for the pooled endowment fund. Therefore, a system and method to import pooled endowment fund data into a database that is automated and efficient is desired.
Additionally, many organizations use flat-files, such as spreadsheets, to perform subaccounting and administrative functions. The use of spreadsheets is inefficient because many records are required, and the ability to query and report data is extremely limited. Spreadsheets, require either manual selection of the records to be reported on, or the development of individual macros for each query or report.
Non-profit organizations differ from commercial enterprises in the types of financial reporting they are required to submit. In addition to standard financial reporting required of commercial enterprises, non-profit organizations are further burdened by strict Financial Accounting Standards Board (“FASB”) requirements that require non-profit organizations to show that they are good stewards of their endowment funds. More specifically, non-profit organizations must show that they are spending money in accordance with their own distribution rules, and also in accordance with distribution and investing rules set by individual donors. Additionally, users are required to track the financial growth of the pooled endowment funds. Spreadsheets can be difficult to use for such tracking and reporting purposes.
Therefore, because many non-profit organizations use cumbersome spreadsheets for accounting functions, an easy and standardized system and method to convert spreadsheet information into a fund management system is desired.